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Selected year-end financial statements of McCord Corporation follow. (Note: All sales are on credit; selected balance sheet amounts at December 31, 2004, were inventory, $32,400;
Selected year-end financial statements of McCord Corporation follow. (Note: All sales are on credit; selected balance sheet amounts at December 31, 2004, were inventory, $32,400; total assets, $182,400;common stock, $90,000; and retained earnings, $31,300.) McCORD CORPORATION Income Statement For Year Ended December 31, 2005 Sales . . . . . . . . . . . . . . . . . . . $348,600 Cost of goods sold . . . . . . . . 229,150 Gross profit . . . . . . . . . . . . . 119,450 Operating expenses . . . . . . . . 52,500 Interest expense . . . . . . . . . . 3,100 Income before taxes . . . . . . . 63,850 Income taxes . . . . . . . . . . . . . 15,800 Net income . . . . . . . . . . . . . . $ 48,050 McCORD CORPORATION Balance Sheet December 31, 2005 Assets Liabilities and Equity Cash . . . . . . . . . . . . . . . . . . . . . . $ 9,000 Accounts payable . . . . . . . . . . . . . . . . . . $ 16,500 Short-term investments . . . . . . . . . 7,400 Accrued wages payable . . . . . . . . . . . . . . 2,200 Accounts receivable, net . . . . . . . . 28,200 Income taxes payable . . . . . . . . . . . . . . . . 2,300 Notes receivable (trade)* . . . . . . . . 3,500 Long-term note payable, secured Merchandise inventory . . . . . . . . . . 31,150 by mortgage on plant assets . . . . . . . . . 62,400 Prepaid expenses . . . . . . . . . . . . . . 1,650 Common stock, $1 par value . . . . . . . . . . 90,000 Plant assets, net . . . . . . . . . . . . . . . 152,300 Retained earnings . . . . . . . . . . . . . . . . . . 59,800 Total assets . . . . . . . . . . . . . . . . . . $233,200 Total liabilities and equity . . . . . . . . . . . . . $233,200 Required Compute the following: (1) ratio of pledged assets to secured liabilities, (2) times interest earned, (3) profit margin ratio, (4) total asset turnover, (5) return on total assets, and return on common stockholders equity
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